U.K. Stores Feel the Pressure as Internet Online Hits Record

The pressure on Britain’s store owners was highlighted starkly in new figures showing almost one fifth of all shopping last month was done online.

Data from the Office for National Statistics this month showed internet spending accounted for a record 19.9 percent of total retail sales. While the share has been creeping up for years, there was a 1 percentage point jump in July alone, suggesting Amazon’s Prime Day discounts played a significant role.

That underscores the pressures faced by U.K. retailers, who have been squeezed by the rise of online shopping and a backdrop of Brexit uncertainty. The fallout has meant high-profile problems for store owners such as House of Fraser and Debenhams Plc, while the likes of electronics chain Maplin have collapsed.

“As our high streets keep feeling the heat, there is no way back from the road towards online shopping,” said Duncan Brewer, Retail and Consumer Partner at consultants Oliver Wyman.

The July data showed that overall retail volumes rose 0.2 percent from June, but a driving force behind the increase was online promotions.

Worse still, the better-than-expected headline figures — sales were forecast to fall — masked weakness across a range of stores. Food sales flat-lined, non-food sales posted the biggest drop in seven months, while total sales growth over the past three months was the weakest this year. Conversely, non-store retailing, which includes internet sales, rose the most since May 2016.

Figures in June showed the number of retail businesses on high streets fell by 2 percent between 2012 and 2017, while those based elsewhere grew by 6 percent.

Amazon Prime Day is an annual event designed to attract users to the firm’s premium delivery service. In the U.S., Amazon said sales over the two days this year surpassed those on Black Friday and Cyber Monday combined.

(Source:supplychainbrain)